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Real Estate

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Passive Investments 101: Increasing Awareness and Understanding on Its Benefits in Building Wealth

Passive income such as real estate investment is one of the key factors that an individual can gain wealth. Passive investment is a strategy for investment which aims to maximize returns on the long run, through keeping the amount of selling and buying to a minimum level. The core concept of passive investing is avoiding fees and dragging on the performance that can potentially happen in frequent trading. Passive investment is not an immediate source of income to build wealth in a fast-paced manner, rather it takes a slow process but steady wealth over time. Passive investment is also called buy-and-hold strategy, wherein an investor buys a security with the intention of owning it for many years. Passive investment investors are not after the profit gained through short-term price fluctuations, also known as “time the market”, but rather the positive returns gained in a given enough time.

What are the passive income strategies? The various sources of passive income are rental income, real estate, interest income, royalty income, dividend income, membership fees, advertising income, affiliate income, business income, pension income and donation income. Real estate properties can be leased such as building and office spaces, so you can earn without too much effort. The younger you invest on real estate income, the sooner and the longer you will taste the sweet of this kind of passive income. Rental income can also be obtained through movable properties like vehicles and equipment.

For interest income, you must have enough money in order to gain interest such as your investments in bank deposits and lending to your debtors. Royalty income can be earned through royalty fees by publishing a book, writing a song or being a great singer, from licenses for using software, your photos for being a professional photographer and trademark for franchising. Dividend income is a passive income earned through stocks or shares of a corporation, and it involves a higher risk though. In dividend income, an investor must be guided by the right knowledge, skills and attitude to the proper discipline about investing in stocks and other securities. Membership fees can be a source of revenue such as in golf club, fitness gym, and membership websites that contain useful and unique contents where users or members pay a regular membership fee to be able to access those contents. The contents of your website can earn membership fees in a form of software, applications, podcast, videos, articles and scripts. Advertising and affiliate income can be earned by generating blogs and websites through direct advertising, third-party advertising and affiliate marketing.

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